Hardware will be the biggest section, followed by software and then services. Telecom AI software revenue will grow from $315.7 million in 2016 to more than $11.3 billion in 2025, at a compound annual growth rate (CAGR) of 48.8%. The primary driver for the market will be “the steady transformation of telecom networks to automated processes with the goal of mostly autonomous network functionality.” Tractica said it believes several key network operators will reach autonomous or near autonomous status by the end of 2024.

The network monitoring and management use case will represent the largest market opportunity for telecom AI over the forecast period, according to the report, representing $23.5 billion, or nearly 61% of total telecom AI software revenue. Revenue for this use case will reach an inflection point in 2021, as telecom operators increasingly adopt SDN and NFV and deploy 5G networks.

“The telecom industry is ripe for AI-driven solutions, with their promise of lowering costs and boosting efficiencies through automation,” says principal analyst Mark Beccue. “Many telecom operators have begun to experiment and deploy AI-driven solutions in both customer-facing and internal organizations.”

The report was released as the UK government unveiled a new £1 billion deal on artificial intelligence which has received backing from 50 leading tech firms and around £300 million of private investment.